Nucor Corp. (IW 500/68), the largest U.S. steelmaker, agreed to acquire Independence Tube Corp. for $435 million as metal producers benefit from a recovery in prices and look to boost their presence in value-added products.
ITC makes hollow structural section steel tubing from plants in Illinois and Alabama, close to Nucor’s sheet mills, the Charlotte, N.C.-based company said Monday in a statement. The purchase price represents six times average earnings before interest, taxes, depreciation and amortization over the 2013-2015 period, it said.
“This acquisition is another important step in our long-term strategy to increase the number of value-added products we can offer our customers,” Nucor Chief Executive Officer John Ferriola said in the statement. “It also adds to our portfolio another growth platform for our team to use to grow our company.”
Nucor is among domestic steelmakers that are benefiting after the U.S. handed down anti-dumping measures on imports from countries including China. Capacity utilization, which measures the amount of a plant that is in use, has climbed this year as those companies regain market share from overseas producers.
By James Attwood